Question 1

The labor-force participation rate equals the percentage of the labor force that is employed.

Accepted Answer

A) True 
 B)False

Question 2

Suppose that bartenders and waiters have no unions. Now suppose that bartenders form a union. What does this do the labor supply and wages of waiters?

Accepted Answer

A)  Both labor supply and wages increase.
B)  Labor supply increases, and wages decrease.
C)  Labor supply decreases, and wages increase.
D)  Both labor supply and wages decrease.E) None of the above
F) B) and C)

Question 3

When a minimum-wage law forces the wage to remain above the level that balances supply and demand, the quantity of labor supplied is lower and the quantity of labor demand is higher than at the equilibrium wage.

Accepted Answer

A) True 
 B)False

Question 4

Right-to-work laws give workers in a unionized firm the right to choose whether to join the union.

Accepted Answer

A) True 
 B)False

Question 5

The natural rate of unemployment is the desirable rate of unemployment for an economy.

Accepted Answer

A) True 
 B)False

Question 6

Who would be included in the labor force?

Accepted Answer

A)  Louie, who is waiting for his new job to start
B)  Daisey, who has become discouraged looking for a job and has quit looking
C)  Donald, an unpaid stay-at-home father
D)  None of the above is correct.E) A) and B)
F) B) and D)

Question 7

Suppose that some people are counted as unemployed when, to maintain unemployment compensation, they search for work only at places where they are unlikely to be hired. If these individuals were counted as out of the labor force instead of as unemployed, then

Accepted Answer

A)  both the unemployment rate and labor-force participation rate would be higher.
B)  both the unemployment rate and labor-force participation rate would be lower.
C)  the unemployment rate would be lower, and the labor-force participation rate would be higher.
D)  the unemployment rate would be higher, and the labor-force participation rate would be lower.E) B) and C)
F) A) and B)

Question 8

Susan is a plant manager in charge of a factory in a relatively poor country. Even though market wages are low, she decides to raise the wages of her workers. Her decision

Accepted Answer

A)  might increase profits if it means that the wage is high enough for her workers to eat a nutritious diet that makes them more productive.
B)  will help eliminate the excess supply of labor.
C)  may cause her workers to reduce the effort they expend at their jobs.
D)  All of the above are correct.E) A) and C)
F) B) and C)

Question 9

President Bigego is running for re-election against Senator Pander. Bigego proclaims that more people are working now than when he took office. Pander says that the unemployment rate is higher now than when Bigego took office. You conclude that

Accepted Answer

A)  one of them must be lying.
B)  both of them could be telling the truth if the labor force, and employment grew at the same rate.
C)  both of them could be telling the truth if the labor force grew slower than employment.
D)  both of them could be telling the truth if the labor force grew faster than employment.E) None of the above
F) C) and D)

Question 10

​Derrick loses his job, but does not look for work. Which of the following are consequences of this change in Derrick's status?

Accepted Answer

A)  unemployment rises and the labor force is unchanged
B)  unemployment rises and the labor force falls
C)  unemployment and the labor force are unchanged
D)  unemployment is unchanged and the labor force fallsE) A) and D)
F) None of the above

Question 11

An economist claims that changes in information technology and unemployment insurance have reduced unemployment. Which of these changes affect frictional unemployment?

Accepted Answer

A)  both the changes in information technology and unemployment insurance
B)  only the changes in information technology
C)  only the changes in unemployment insurance
D)  neither the changes in information technology nor the changes in unemployment insuranceE) None of the above
F) A) and C)

Question 12

Minimum-wage laws affect all workers.

Accepted Answer

A) True 
 B)False

Question 13

Explain how the actions of labor unions generate greater unemployment.

Accepted Answer

Labor unions push wa...

Question 14

Lucy quit her job because she was unhappy at work. Genevieve was fired because she frequently surfed the Internet rather than working on her assigned tasks. Who is eligible for unemployment insurance benefits?

Accepted Answer

A)  both Lucy and Genevieve
B)  Lucy but not Genevieve
C)  Genevieve but not Lucy
D)  neither Lucy nor GenevieveE) A) and D)
F) All of the above

Question 15

Who is included in the labor force by the Bureau of Labor Statistics?

Accepted Answer

A)  Dia, an unpaid homemaker not looking for other work
B)  Kevin, a full-time student not looking for work
C)  Sarah, who does not have a job but is looking for work
D)  None of the above is correct.E) B) and C)
F) None of the above

Question 16

Public policy

Accepted Answer

A)  can reduce both frictional unemployment and the natural rate of unemployment.
B)  can reduce frictional unemployment, but it cannot reduce the natural rate of unemployment.
C)  cannot reduce frictional unemployment, but it can reduce the natural rate of unemployment.
D)  cannot reduce either frictional unemployment or the natural rate of unemployment.E) B) and C)
F) B) and D)

Question 17

Data on unemployment indicate that most people who become unemployed will soon find jobs.

Accepted Answer

A) True 
 B)False

Question 18

When a union is present in a labor market, wages are not determined by the equilibrium of supply and demand.

Accepted Answer

A) True 
 B)False

Question 19

According to the theory of efficiency wages, it may be profitable for firms to keep wages high even in the presence of a surplus of labor.

Accepted Answer

A) True 
 B)False

Question 20

Table 28-11
2015 Labor Data for Tajnia 
-Refer to Table 28-11. The labor-force participation rate of Tajnia in 2015 is about 33.3 percent.

Accepted Answer

A) True 
 B)False

Exam 28: Unemployment and Its Natural Rate

When a minimum-wage law forces the wage to remain above the level that balances supply and demand, the quantity of labor supplied is lower and the quantity of labor demand is higher than at the equilibrium wage.

Correct AnswerverifiedShow Answer

Who is included in the labor force by the Bureau of Labor Statistics?

Correct AnswerverifiedShow Answer

Explain how the actions of labor unions generate greater unemployment.

Correct AnswerverifiedLabor unions push wa...View AnswerShow Answer

Right-to-work laws give workers in a unionized firm the right to choose whether to join the union.

Correct AnswerverifiedShow Answer

​Derrick loses his job, but does not look for work. Which of the following are consequences of this change in Derrick's status?

Correct AnswerverifiedShow Answer

When a union is present in a labor market, wages are not determined by the equilibrium of supply and demand.

Correct AnswerverifiedShow Answer

According to the theory of efficiency wages, it may be profitable for firms to keep wages high even in the presence of a surplus of labor.

Correct AnswerverifiedShow Answer

President Bigego is running for re-election against Senator Pander. Bigego proclaims that more people are working now than when he took office. Pander says that the unemployment rate is higher now than when Bigego took office. You conclude that

Correct AnswerverifiedShow Answer

The labor-force participation rate equals the percentage of the labor force that is employed.

Correct AnswerverifiedShow Answer

Data on unemployment indicate that most people who become unemployed will soon find jobs.

Correct AnswerverifiedShow Answer

Table 28-11 2015 Labor Data for Tajnia -Refer to Table 28-11. The labor-force participation rate of Tajnia in 2015 is about 33.3 percent.

Correct AnswerverifiedShow Answer

Minimum-wage laws affect all workers.

Correct AnswerverifiedShow Answer

Who would be included in the labor force?

Correct AnswerverifiedShow Answer

Lucy quit her job because she was unhappy at work. Genevieve was fired because she frequently surfed the Internet rather than working on her assigned tasks. Who is eligible for unemployment insurance benefits?

Correct AnswerverifiedShow Answer

The natural rate of unemployment is the desirable rate of unemployment for an economy.

Correct AnswerverifiedShow Answer

Public policy

Correct AnswerverifiedShow Answer

Suppose that some people are counted as unemployed when, to maintain unemployment compensation, they search for work only at places where they are unlikely to be hired. If these individuals were counted as out of the labor force instead of as unemployed, then

Correct AnswerverifiedShow Answer

An economist claims that changes in information technology and unemployment insurance have reduced unemployment. Which of these changes affect frictional unemployment?

Correct AnswerverifiedShow Answer

Suppose that bartenders and waiters have no unions. Now suppose that bartenders form a union. What does this do the labor supply and wages of waiters?

Correct AnswerverifiedShow Answer

Susan is a plant manager in charge of a factory in a relatively poor country. Even though market wages are low, she decides to raise the wages of her workers. Her decision

Correct AnswerverifiedShow Answer

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Labor unions push wa...
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Derrick loses his job, but does not look for work. Which of the following are consequences of this change in Derrick's status?

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